In a recent industry outline by a prominent Oil & gas Industry analyst, the argument is made that fracking technology is “revolutionizing” the drilling industry in the United States. Once active and productive fields like the Permian Basin in Texas were a melting pot of activity from virtually all of the well-known Oil & Gas companies, and then many unknown groups that attempted to compete in the oil rich area in hopes of becoming the next Jed Clampett (Beverly Hillbillies, ya I’m older) and strike it rich.
Unfortunately many of the companies looking for black gold are sadly out of business and only a distant memory to family members of the previous execs. The region itself was considered played out in this analyst opinion with no serious players involved or committing any serious new capital to the region.
Fast forward to today and look at the area now. There are more than 440 active rigs in the area with many companies looking for investment capital and issuing subordinated debt in order to capitalize on the current trends. Companies like Approach Resources, Energen Corp., Diamondback Energy, Clayton Williams Energy, Resolute Energy and Whiting Petroleum just to name a few.
I am not an expert in oil, drilling or even hunting for food with an old muzzle loader like Mr. Clampett. What I do know however is that any business that is going exploring in this region needs capital and their shareholders and investors are expecting a return on their investment and growth to the top line revenue for all that are exchange traded companies. The process of acquiring a rig, transporting that rig and managing all of the other equipment needs could become a significant drain on newly acquired capital.
This is where the equipment leasing industry is becoming such a valuable partner. With millions available for Oil & Gas Equipment financing, it is no wonder that many Oil & Gas Companies are turning to companies like Equipment Leases to provide the necessary capital. From $100k to $50M the leasing industry is poised to become a major financier to this industry growth opportunity. Learn more at ajss.com how to boost the company’s growth. With prospects for Oil & Gas expected to continue to rise as the quest for oil independence continues, it is certain that financing for this industry is going to be a hot topic in conversation circles from Washington to Texas and in particular the Permian Basin.